CASE NO.: A 209/2009

IN THE HIGH COURT OF NAMIBIA

In the matter between:

REMA TIP TOP NAMIBIA (PTY) LTD AND OTHERS v SEPP THALMAIER AND OTHERS

PARKER J

2011 March 17

the Court over him on account of the second respondent being resident and domiciled in South Africa - Court finding that the first applicant is a Namibian company in terms of the Companies Act (Act 61 of 1973 (as amended), the second respondent is a director of the first applicant, the application relates to allegations of second respondent's breach of fiduciary duty towards first applicant and the relief claimed is limited to Namibia - Consequently, Court finding that the second respondent is subject to the jurisdiction of the Court in the instant proceedings -Accordingly, Court dismissing second respondent's preliminary objection.

(a company (first applicant)), a natural person (second applicant),  and  third  applicant  (a close  corporation)  -

Respondents challenging locus standi and authority of applicants to bring the application - Court accepting respondents' contention that in the absence of an unanimous resolution of the shareholders made by voting in general meeting in terms of a clause in the shareholders agreement relating to first applicant, applicants lack locus standi and authority to launch application - Furthermore, Court rejecting applicants' reliance on the doctrine of 'derivative' action (or 'application') as clothing second applicant with authority to bring application - Court reasoning that the company on whose behalf the second applicant purports to act is the first applicant but that company has not been joined and cited as a respondent.

CASE NO.: A 209/2009

IN THE HIGH COURT OF NAMIBIA

In the matter between:

and

Delivered on:       	2011 March 17

JUDGMENT

Mr Heathcote SC, assisted by Mr Dicks, have moved the Court by notice of motion for an order in terms contained in the notice of motion. Affidavits of the second applicant, inter alios, were used in support of the application. The respondents (i.e. the first, second and fourth respondents) have moved to reject the application; and in that behalf the first respondent and the second respondent (the managing director of the fourth respondent) filed opposing affidavits.  In his affidavit, the second respondent, represented by Mr Graves SC, has raised preliminary objections, including the question of jurisdiction of this Court to the effect that he is 'a resident of, and domiciled, in the Republic of South Africa from where I conduct all of my business dealings for the Rema Tip Top group of companies which includes - (significantly and unwittingly, I must say) - RTT Namibia, and Rema Tip Top South Africa (Pty) Ltd ('RTT South Africa'). That being the case, so the objection goes, 'The applicants have not taken any steps to clothe this Court with the necessary jurisdiction to grant the orders sought in prayers 2 and 3 of the notice of motion.' The second respondent concludes, 'In the absence of any prospect of the orders sought in prayers 2 and 3 being effective there is, I submit, no basis for this Court to assume jurisdiction in respect of me whilst I am resident and domiciled in the Republic of South Africa.

[2] The other preliminary objection properly so called challenges the locus standi and authority of the first applicant to launch the application. That is to say; according to the second respondent, in the second applicant's founding affidavit the second applicant 'alleges that he was authorized to launch this application against Thalmaier (the first respondent) in terms of a resolution of the board of directors of RTT Namibia (the first applicant) of 11 March 2009 ... Significantly Rom (the second applicant) does not allege that he is authorized by the first applicant to represent it in this application against me, Stahlgruber (the third respondent) and Nenana (the fourth respondent).' As respects this point, the first respondent, represented by Mr Totemeyer SC, makes common cause with the submission made on this point by counsel for the second respondent in counsel's heads of argument.
[3] I shall treat the preliminary objection on the question of jurisdiction first and after that the preliminary objection on locus standi and authority because a determination of these objections may be dispositive of the application.

[8] Counsel submitted that legal representatives could not have been appointed 'to prosecute such proceedings' because of the absence of an unanimous resolution of the shareholders made by voting in general meeting in terms of clause 11, read with clause 11.1.17, of the shareholders agreement (Annexure 'SR4B' to the second applicant's affidavit). In buttressing their argument counsel submitted further that from the proceedings of the meeting of the board of directors of 11 March 2009 it is indisputable that the first applicant was not authorized to institute proceedings against the second respondent. I accept counsel's submission. It is clear from 'Resolution 2' (being a part of Annexure 'SR42' to the affidavit of the second applicant) that no valid resolution was made that could possibly clothe the applicants with authority to institute proceedings against the second respondent.

[9] In an attempt to meet the challenge respecting locus standi and authority to bring the proceedings against the second respondent and having realized that the reliance on 'Resolution 2' could not succeed, the second applicant then says he relies on the doctrine of 'derivative action' ('application') in the following terms:
'I also launched the application on behalf of the first applicant against the first and second respondents derivatively, in my own name and on behalf of the third applicant who authorized me to do so.'

Mr Graves's response thereto in submission is that the second applicant who is a member of the third applicant has no right himself to proceed derivatively. Counsel goes on, 'Furthermore, the company on whose behalf the second applicant purports to act is the first applicant. The first applicant should have been cited and joined as a respondent.'

[11]   In the result I make the following order:

The application is dismissed with costs, including costs consequent upon the employment of one instructing counsel and one instructed counsel; in favour of -

PARKER J

COUNSEL ON BEHALF OF THE APPLICANTS:
Adv. R Heathcote SC Adv. G Dicks

COUNSEL ON BEHALF OF THE FIRST RESPONDENT:
Adv. R Totemeyer SC

COUNSEL ON BEHALF OF THE SECOND AND FOURTH RESPONDENT:
Adv. N J Graves SC